24/7 Wall St. survey crowns Illinois worst-run state in the nation

Kevin Hoffman

REBOOT STAFF

Dec 5, 2014

In just one year Illinois has gone from third worst-run state in the nation to the very worst.

24/7 Wall St. conducted the survey which ranks all 50 states based on how well they’re managed by measuring key financial, social and economic indicators. While the report acknowledges states flush with natural resources benefit greatly from their energy industries, such as North Dakota — the best-run state for a third consecutive year — lasting effects of the recession and housing crisis continue to hurt states that are among the worst-run in the country, albeit to a lesser extent than in past years.But laying blame on the 2008 economic downturn doesn’t absolve or justify states that continually bungle management of finances and exert poor governance.

While some states’ economic fortunes are closely tied to the rise and fall of individual industries, which are often outside their control, each state must make the best of its own situation. Governments, as stewards of their own economies, need to prepare for the worst, including the collapse of a vital industry. Good governance is about balancing tax collection and state expenditure in a way that provides essential services to residents without sacrificing a state’s long-term fiscal health. Many of the best-run states in the country set money aside each year for emergencies. Should the Alaskan economy run into trouble, the state has enough money in reserve to match more than 21 months of general fund spending.

As is the case for many of the poor-run states on this list, hundreds of thousands of Illinoisans have left the state in recent years — 137,000 people between 2010 and 2013. The state’s poor housing market and a 16.2 percent decrease in median home values from 2009 to 2013 (the second largest drop in the country) are contributing factors to the massive exodus of residents. And, of course, the worst-in-nation pension debt, which tops $100 billion, as well as the lowest credit rating of any other state, reflect the Illinois government’s lamentable handling of finances.

“According to Moody’s, the state’s rating reflects its low fund balances and high pension obligations, as well as its ‘chronic use of payment deferrals to manage operating fund cash,’” the report noted.

Top 10 worst-run states:

1. Illinois

• Debt per capita: $4,992 (11th highest)
• Credit Rating (S&P/Moody’s): A-/A3 (the highest)
• 2013 unemployment rate: 9.2% (third highest)
• Median household income: $56,210 (17th highest)
• Poverty rate: 14.7% (25th lowest)

2. New Mexico

• Debt per capita: $3,621 (20th highest)
• Credit Rating (S&P/Moody’s): AA+/Aaa
• 2013 unemployment rate: 6.9% (24th highest)
• Median household income: $43,872 (6th lowest)
• Poverty rate: 21.9% (2nd highest)

3. Mississippi

• Debt per capita: $2,405 (14th lowest)
• Credit Rating (S&P/Moody’s): AA/Aa2
• 2013 unemployment rate: 8.6% (6th highest)
• Median household income: $37,963 (the lowest)
• Poverty rate: 24.0% (the highest)

4. Rhode Island

• Debt per capita: $8,761 (3rd highest)
• Credit Rating (S&P/Moody’s): AA/Aa2
• 2013 unemployment rate: 9.5% (2nd highest)
• Median household income: $55,902 (18th highest)
• Poverty rate: 14.3% (24th lowest)

5. Kentucky

• Debt per capita: $3,436 (23rd highest)
• Credit Rating (S&P/Moody’s): AA-/Aa2
• 2013 unemployment rate: 8.3% (7th highest)
• Median household income: $43,399 (5th lowest)
• Poverty rate: 18.8% (6th highest)

6. Arizona

• Debt per capita: $2,140 (11th lowest)
• Credit Rating (S&P/Moody’s): AA-/Aa3
• 2013 unemployment rate: 8.0% (12th highest)
• Median household income: $48,510 (21st lowest)
• Poverty rate: 18.6% (9th highest)

7. Georgia

• Debt per capita: $1,341 (4th lowest)
• Credit Rating (S&P/Moody’s): AAA/Aaa
• 2013 unemployment rate: 8.2% (10th highest)
• Median household income: $47,829 (18th lowest)
• Poverty rate: 19.0% (5th highest)

8. New Jersey

• Debt per capita: $7,287 (5th highest)
• Credit Rating (S&P/Moody’s): A+/A1
• 2013 unemployment rate: 8.2% (10th highest)
• Median household income: $70,165 (3rd highest)
• Poverty rate: 11.4% (8th lowest)

9. Missouri

• Debt per capita: $3,373 (25th highest)
• Credit Rating (S&P/Moody’s): AAA/Aaa
• 2013 unemployment rate: 6.5% (18th lowest)
• Median household income: $46,931 (14th lowest)
• Poverty rate: 15.9% (23rd highest)

10. Alabama

• Debt per capita: $1,804 (7th lowest)
• Credit Rating (S&P/Moody’s): AA/Aa1
• 2013 unemployment rate: 6.5% (18th lowest)
• Median household income: $42,849 (4th lowest)
• Poverty rate: 18.7% (7th highest)

View the rest of the report here.

NEXT ARTICLE: Illinois layoffs to affect more than 1,500 workers in the coming months

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   Kevin Hoffman is a Reboot Illinois staff writer who graduated from the University of Iowa with a degree in journalism, political science and international studies. He believes keeping citizens informed and politicians in check is the best way to improve Illinois and bring about common sense reform.  Follow us on Facebook.